Millions lost to Wales in powers transfer ‘rip-off’

WALES has been robbed of millions of pounds because Westminster has failed to pass on sufficient money when responsibility for funding a variety of public services has been transferred to the Assembly Government, we can reveal.

WALES has been robbed of millions of pounds because Westminster has failed to pass on sufficient money when responsibility for funding a variety of public services has been transferred to the Assembly Government, we can reveal.

Last night, as it prepared to announce today where it will impose stringent cuts across the Welsh public sector, the Assembly Government confirmed it had been shortchanged by its counterpart in London.

Plaid Cymru immediately called for an urgent review of the way Wales is funded, and said such a review should consider compensation for money which should have been paid by the UK Government in the past.

Whitehall leaving Wales out of pocket: next page

Whitehall leaving Wales out of pocket

INCREASING responsibilities for the Assembly Government have not been accompanied by enough extra money to provide the services, it has been confirmed.

Instead, Whitehall has consistently shortchanged Cardiff when a succession of new powers has been passed down the line.

Since the National Assembly was established in 1999, it has accrued additional responsibilities in a wide range of areas, some obscure and some important core functions.

We identified three examples of functions where power was transferred to the Assembly Government and asked for details of the amount of money passed over:

Under the Fire and Rescue Services Act 2004, the Assembly Government took over responsibility for those services from the then Office of the Deputy Prime Minister (ODPM). In 2004-05, the ODPM transferred £8.422m to the Assembly Government to cover the cost of running the service. In 2005-06 the amount transferred went down to £6.858m, decreasing to £2.031m in 2006-07 and rising to £3.701m in 2007-08.

In its disclosure to the Western Mail, the Assembly Government said: "The amount of £3.701m in 2007-08 was then transferred into the Assembly Government’s baseline.

"From April 1, 2008 there was no specific monetary transfer to the Assembly Government. Fire and Rescue Service funding is now met from the annual UK Government block grant settlement provided to the Assembly Government."

A section of the Children Act 2004 saw responsibility for the Children and Family Court Advisory and Support Service in Wales (Cafcass) transferred to the Assembly Government. Cafcass provides expert independent advice to courts on the interests of children involved in family proceedings. In the two financial years, 2004-05 and 2005-06, the Department for Education and Skills transferred exactly £6m to the Assembly Government. In the two following years – 2006-07 and 2007-08 – the amounts transferred rose to £6.001m.

The disclosure letter from Cafcass states: "From April 1, 2008 there was no transfer from the Department for Education and Skills to the Assembly Government and funding was met through the UK Government block grant settlement."

The third area in which we sought information related to the transfer of responsibility for funding rail services in Wales. In a letter, the Assembly Government said: "Under the Railway Act 2005, Welsh Ministers received devolution of certain powers for rail matters in Wales from the Secretary of State for Transport. These powers were fully enabled as from April 2006 and the financial transfer that accompanied the transfer of powers is as follows:

"In 2006-07 the Department for Transport made a transfer of £141,023,183 to the Assembly Government for the subsidy requirement for the Arriva Trains Wales franchise. This excludes the payment of a small number of English-only services that Arriva Trains Wales operates as these continue to be funded by the Department for Transport.

"In 2007-08 the Department for Transport made a transfer of £142,464,830 to the Assembly Government for the subsidy requirement for the Arriva Trains Wales franchise. This excludes the payment of a small number of English-only services that Arriva Trains Wales operates as these continue to be funded by the Department for Transport.

"From April 1, 2006 to March 31, 2008, £125,000 per annum was transferred in respect of three additional rail team staff within the Assembly Government.

"From April 1, 2006 to March 31, 2008, £120,354 per annum was transferred in respect of two franchise management posts within the Assembly Government.

"The total value transferred from the Department for Transport to the Assembly Government for the period April 1, 2006 to March 31, 2008 was £283,978,721.

"From April 1, 2008 there was no specific monetary transfer from the Department for Transport to the Assembly Government. Franchise payments are now met from the annual UK Government block grant settlement provided to the Assembly Government."

Plaid Cymru economic spokesman Jonathan Edwards said: "Once again we have further evidence of the way in which the UK Treasury is short- changing the Welsh Government. Considering that the Welsh Government is already underfunded due to the antiquated Barnett formula, we can ill afford a situation where extra powers are devolved without sufficient funds.

"Yet again the case for an urgent review of the way Wales is funded is made. There can be no justification for delaying such a review until after the March referendum. There is a clear case for such a review to revisit these issues and make sure that any new funding mechanism takes into consideration liabilities owed by the UK Government."

An Assembly Government spokesman said last night: "Over the past few years, certain functions and responsibilities have transferred to Wales from the UK Government. Examples include responsibility for the management of fire service functions in Wales, and the transfer of the staff and operations of Cafcass – the child and family advisory service.

"While there has been a transfer of some financial support to provide these additional responsibilities, it has not been sufficient to cover the increasing demand for these services.

"The shortfall further highlights the need for the UK Government to implement a fairer funding formula for Wales, as recommended by the Holtham Commission."

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